Under perfect capital mobility and a floating exchange rate system, expansionary fiscal policy leads to
a. an increase in income and the interest rate.
b. no change in the interest rate and a fall in the trade balance.
c. no change in the interest rate and a decrease in income.
d. an increase in interest rates and a fall in the trade balance.
e. no change in interest rates and the exchange rate.
B
You might also like to view...
Amanda and Hector each produce homemade ketchu
What will be an ideal response?
The distribution of income in the United States is characterized by the following relationship between the mean, median, and mode incomes
A) mean income < median income < mode income. B) mode income < median income < mean income. C) median income < mean income < mode income. D) mode income < mean income < median income.
Unlike a firm in pure competition, a monopolist may be able to
a. block the entry of new firms into the industry. b. continue to earn economic profits in the long run. c. earn economic profits in the short run. d. both block the entry of new firms into the industry and continue to earn economic profits in the long run.
Why do economists measure responsiveness of demand to price in percentage changes rather than in absolute changes?